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Taxpayers run up more unpaid dues

Official figures show that within 15 months debtors have added another 13 bln to their expired obligations By Prokopis Hatzinikolaou

Taxpayers and corporations have amassed unpaid taxes of 13 billion euros in the 15 months from January 2013 to end-March 2014, as data published on Friday by the General Secretariat for Public Revenues showed that some 2.45 million citizens and companies have debts to the state.

The figures reveal that nearly one in two taxpayers is unable to meet their tax obligations and that the burden imposed on them is far above the revenues target set. Given that the collection rate of taxes averages at 80 percent, in order to collect 51.4 billion euros last year the government imposed taxes of 64 billion euros.

The quarterly report of Parliament’s budget office stressed on Friday that “the excessive taxation of citizens’ property increases the incentive for tax evasion and leads many taxpayers to creating new expired debts to the state due to the inability to pay.”

Taxpayers have also turned their backs on the payment plans proposed by the Finance Ministry, the general secretariat’s data reveal. This is believed to be because the amount of the monthly installments is so high that taxpayers are dissuaded from taking the plans up. The ministry has reportedly acknowledged the problem and has discussed it with the representatives of Greece’s creditors, but they opposed any changes arguing that this would be unfair to those who have already agreed to a payment plan.

The budget office’s report also noted the need for a downward revision of the high primary surplus targets, saying that “even Norway could not achieve such high rates.”

Its report notes that “a comparative analysis with a relevant study by the International Monetary Fund shows that there is a general issue with the sustainability of primary surpluses.”

This point meets has been reiterated Finance Ministry, which estimates that reaching a primary surplus of 3 percent of gross domestic product next year is feasible, but climbing to 4.5 percent and staying at that level appears unlikely. The government had brought the issue up in talks with its creditors last year and intends to do so again given that the issue has been frozen.